Paychex Inc. (NASDAQ:PAYX) shares slipped 2.8% in premarket trading Wednesday after the HR services provider posted fourth-quarter financial results that met analyst expectations on both revenue and earnings.
The company reported adjusted diluted earnings per share (EPS) of $1.19 for the quarter, exactly matching consensus forecasts. Revenue came in at $1.43 billion, representing a solid 10% increase compared to the same period last year.
Revenue from Paychex’s Management Solutions segment rose 12% to $1 billion. This growth was driven by the recent acquisition of Paycor (NASDAQ: PYCR), as well as higher revenue per client fueled by pricing strategies and deeper product adoption, including offerings in HR Solutions and Retirement services. When excluding the Paycor acquisition, organic growth in the segment was roughly 3%.
“Paychex delivered strong results this year, aligned with our strategic goals, demonstrating our capacity to navigate evolving market challenges while improving customer experience and maintaining industry-leading margins,” said John Gibson, President and CEO. He added, “The integration of Paycor positions us well to capitalize on growth opportunities in the digital and AI-driven human capital management landscape.”
Interest income earned on client funds increased 18% year-over-year to $45.2 million, primarily due to the Paycor acquisition. Excluding this impact, interest income still grew about 3%.
Looking ahead to fiscal 2026, Paychex expects total revenue growth between 16.5% and 18.5%, with adjusted diluted EPS projected to increase 8.5% to 10.5%. Management Solutions revenue is anticipated to grow 20% to 22%, while PEO and Insurance Solutions revenue is forecast to rise between 6% and 8%. The company also expects adjusted operating margins to hold steady at around 43%.